Largest cost of living rise ever

IE BIGGEST cost-of-living increase since the war gets underway on In Dent onday. The magic figure is 10 per cent—10 per cent on detergents, INVESTIGATION BY prices we chen resis in a season other items pains look large ages, —Tories can change rate when YOU FOOT BILL levied value VAT the packages it comes in do. So do the services like transport used by a retailer. These extra costs will be reflected in higher prices.

Administrative costs involved in VAT will also increase prices. VAT is a unique tax in that it throws the burden of collection on the trader.

It is at 10 per cent added at each stage commodity's journey basic supplier to shop.

Hence a manufacturer is charged 10 per cent on the value he adds by processing raw materials.

But the manufacturer gets this back by charging wholesaler an extra 10 per cent on the product.

The process is repeated by che retailer who passes on the tax to the customer again in the form of a higher price. But there the buck stops, the housewife has no means of passing on the tax increase and she foots the whole tax bill.

To make sure he does not lose on the transaction, each they like Treasury to 15 per cent 18 per cent without any Act of Parliament.

These powers also extend to food which could lose its zero-rated' status at any time.

This gives the state and the Tories an immediate weapon against the working class. Any wage rises can be recouped rapidly by jacking up VAT.

An increase in VAT and a broadening of its scope to abolish zero-rated items is a certainty because of tendencies in the Common Market.

STEPHEN JOHNS STEPHEN • JOHNS TOMATOES CAPESI SALAD trader must estimate the price he should charge on every good to get VAT back as well as satisfy the Inland Revenue that he is not cheating.

The book-keeping involved is enormous.

It has been estimated that an extra 6,000 civil servants will have to be recruited by the Customs and Excise to deal with the tax.

In industry and commerce two to three times that number will have to be employed to keep the books straight.

The extra cost will fall entirely on the shopper in the form of higher prices.

In Eire, where VAT is already in operation, one retailer with a staff of 600 in 15 supermarkets has found that overtime caused by VAT calculations is costing him an extra £2,000 a MUCH DEARER This burden he says, is passed on to the shopper, who pays more for food.

So through more expensive packaging and higher dministrative costs food will be much dearer because of VAT.

The standard rate of VAT in France is 23, Norway 20, Belgium 18, Netherlands 14, Denmark 12.5 and Germany 11, in all these countries food is subject to the tax.

VAT in Britain may take some years to reach Common Market levels, but its coverage will be brought into line sooner.

Under the proposed economic and monetary union of the Market, goods must flow freely across national borders.

The European capitalists Will press the Tories to widen the VAT coverage in Britain to avoid trade complications.

The Tories will the initial shock worn off.

There are two other possible ways in which VAT will lead to higher prices.

People still have painful memories of decimalization. Firms and retailers benefited by using the change to decimals as an excuse for The same will undoubtedly happen with VAT. We will have the stories of 'rounding up' to take care of the extra 10 per cent.

CYNICAL LIE

Finally VAT payments by retailers to the Inland Revenue come well after the goods on which the tax is levied have been sold.

Shopkeepers therefore will have to calculate in advance how much extra they will charge to compensate for future tax payments.

The tendency will be to err on the side of caution and over-charge rather than to cut margins and be caught out of pocket. Again the housewife will suffer.

The government boasts that VAT will increase the cost of living by l or 2 per cent. This is a cynical lie.

All evidence from the Common Market shows that after VAT is introduced the cost of living rises steeply and goes on rising.

GET YOUR BOOKS, PERIODICALS AND paperbacks PARŁKBACKS CENIKE 28 charlotte st NOW OFEN Mondav to Thursdav 9am-6 p.m.. Fridays (late nighi In Denmark VAT was introduced in 1967. Before troduced prices were rising 1.67 per cent per quarter. Immediate- cent per ( ly after ly after they were rising 6.56 per 6.56 per cent.

The figures for France were 0.89 before, 1.77 after; Germany 0.0 betore; 0.9 after; Netherlands 1.6 per cent before, 4.72 per cent after; Luxemburg 0.54 before, 2.35 after.

Britain will not be an exception to this rule.

The Tory adverts we read and see on the television, therefore, are just the start of a cynical campaign to fool the British public, especially the working class. Which has been deprived of the right to fight for a higher standard of living under Phase Two.

But the Tories are tricking fewer and fewer people. And they will fail over VAT.

STING More and more people realize this tax means more poverty.

It means stinging the poor to help the rich and it means wiping out the social legislation that • gave our tax system its first progressive bias in favour of the working class. Monday, but the impact will VAT will hit. us all only increase the desire of wage earners everywhere to get rid of the government that rules in the name of higher prices, speculation and profit.

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